Earlier this year I wrote about some research that revealed how just 10% of CIOs had any kind of presence on social media. That means no Twitter account, no LinkedIn profile, no Facebook page.
So it’s interesting to see some new research by Stanford University that suggests that whilst they may be using social media more, they still don’t see the benefits of it. They surveyed over 180 CEOs and other senior managers in an attempt to find out what they know about social media and how it’s currently used in their business.
Sadly, but perhaps not surprisingly, most of them knew very little.
“Companies appreciate the potential that social media can have to transform all aspects of their business: branding, reputation, communication, outreach, and identifying strategic risks,” says Professor David F. Larcker of the Stanford Graduate School of Business and lead author of the study. “They also realize the serious threats that it can pose. They’re just not doing very much about it.”
Amongst the key findings in the report were:
- Less than 25% of senior managers, and just 8% of directors receive reports detailing how social media is performing for them. Almost half don’t collect any ROI information at all!
- Whilst 90% of managers believe they understand the risks involved in using social media, less than 1/3 actually monitor the social web for negative mentions, and just 14% use metrics from social media to measure corporate performance.
- 59% of companies use social media to interact with customers, 49% to advertise and 35% to research customers. 30% use it to research competitors and new products/services, or to communicate better with employees.
The report revealed that the biggest stumbling block for executive understanding of social media is that they lack an understanding of how to tie social media usage together with corporate performance.
“The majority of those we surveyed don’t have social media guidelines in place at their companies, haven’t had a social media expert consult with their company, and don’t have systems in place for gathering key information. They are putting themselves at serious risk by not taking action,” Larcker concludes.
The study’s authors recommend that companies take the following steps to implement a social media strategy that integrates with their corporate strategy and risk management program:
- Assess their current capabilities with social media
- Determine how social media fits with their strategy and business model
- Map their companies’ key performance indicators and risk factors to information available through social media
- Implement a “listening” system to capture social media data and transform it into metrics
- Develop formal policies and guidelines for employees, executives, and directors
- Consider the legal and behavioral ramifications that could be involved if the company’s board receives summary data about social media.
Is it too cruel to say because most wouldn't know their arse from their elbow?
Just a little bit Nick 😉
Adi, we are thinking on the same page. I just finished a column about why are brands NOT getting the value of Social Media – before I saw this post of yours. I am astounded that even the SM execs are so traditional in their thinking. I've pitched an innovative campaign to a number of companies and get such lame replies – IF I get any reply. Those companies that get aboard sooner will benefit and the majority of the rest will be playing catch-up! Very frustrating as we're in this transition phase…
Thanks for the comment Bruce. All comes down to ROI doesn't it? If you can prove what you do makes a difference to the bottom line then it's easy for execs to see the value. If you can't however…
They don't get it because they feel they don't need it. Most suits I meet feel above the twitterings of their customer, employee, member or patient. They (and I quote) "have arrived". And those who have arrived are seldom if ever motivated to connect. It's a shame. We live in a world that needs access. Not so much to data because that's everywhere. But to people who can make a difference. And those at the top are the ones who decide how much "difference making" is actually going to happen in their companies/organizations. Short: we don't get what we don't want.
It's a good point Tim. It's a bit like the 'Innovators Dilemma' popularised by Clayton Christensen, except that rather than a company becoming complacent after they have 'won' in one industry, we have executives becoming complacent once they reach the top. They rest on the laurels that helped them reach their lofty position, despite the world demanding they do new things.
Not an easy thing to overcome. Opening up the strategy setting process would be one way, but we still live in the era of superhero leaders, and these guys (usually men) have to justify their vast salaries somehow, so they often monopolise strategy.
It's all the 'Cs' – lack of positive communication, no champions to push the cause, it's a BIG change for some and it's not clear enough (strategically) how it affects their 'bottom' line!
I think the champions is a massive thing Louise. A big issue is that of starting too big. Not only are you spreading yourself quite thinly, you also run the risk of not having everyone on board because the thing hasn't been proven yet. Much better imo to start small with those that are already on board. Get your failures out of the way whilst they're small enough not to make a difference (and not be noticed), and then when you have some success that is measurable, THEN go to the senior managers and look for buy-in to roll it out further.
It's an interesting time for social media in the corporate sector. There is a sense amongst managers that they SHOULD be using it. But they aren't sure how. So too often, they will slap up some icons on their website and tweet out their homepage (ARGH) and then expect a watershed of attention.
That's right Ruth. It's a 'build it and pray' approach.
There's an old Chinese proverb that says "People who don't know how to smile should not open shop". I think that the new version of this old proverb would be that people who don't know about social media should not be doing business or not be placed in leadership positions. In any case, I think that as social media is gaining importance, this breed will be like dinosaurs.